I looked at the full-res pictures, and can see the issue he's talking about. It's not actually a hole in the sense that it doesn't show through, but I'm still not sure how I missed it. I'm pretty sure I could fight the return if it was just the fly issue, since the pictures are pretty clear. I've fought stuff like that before. I just refunded the buyer, but blocked him because of his attitude, and for not looking at the listing in the first place.
From his other feedback left, it doesn't seem he's in the habit of leaving negatives. Fingers crossed... I'm only out $12.50 on the purchase.
He came off to me ok. Not super pushy just saying unhappy and wants it resolved. I'm ok with that. I don't think he would be the type to leave you a neg. I would have handled it the same as you. Half the battle on ebay is learning how to navigate these waters.